Infosys Q2 results: Quarterly attrition declined for third quarter in a row

Infosys Q2 results have been announced, and the company  reported strong Q2 performance with year-on-year growth at 18.8 percent

Infosys reported strong Q2 performance with year-on-year growth at 18.8% and sequential growth at 4.0% in constant currency. Year on year growth was in double digits across all business segments in constant currency terms. Digital comprised 61.8% of overall revenues and grew at 31.2% in constant currency. Operating margin for the quarter increased sequentially by 140 bps to 21.5%. Large deal TCV for the quarter was robust at $2.7 bn, highest in last 7 quarters. FY 23 revenue guidance is revised to 15%-16%; operating margin guidance is also revised to 21%-22%.

“Our strong large deal wins and steady all-round growth in Q2 reflect the deep relevance and differentiation of our digital and cloud solutions for clients as they navigate their business transformation”, said Salil Parekh, CEO and MD. “While concerns around the economic outlook persist, our demand pipeline is strong as clients remain confident in our ability to deliver the value they seek, both on the growth and efficiency of their businesses. This is reflected in our revised revenue guidance of 15% to 16% for FY 23”, he added.

Key highlights of Infosys Q2 results

Revenues in CC terms grew by 18.8% YoY and 4.0% QoQ

• Reported revenues at Rs 36,538 crore, growth of 23.4% YoY

• Digital revenues at 61.8% of total revenues, YoY CC growth of 31.2%

• Operating margin at 21.5%, decline of 2.1% YoY and increase of 1.4% QoQ

• Basic EPS at Rs 14.35, growth of 11.5% YoY

• FCF at Rs 4,752 crore, decline of 9.9% YoY; FCF conversion at 78.9% of net profit

“Operating margins in Q2 expanded sequentially by 150 bps, helped by our operational rigor. While supply side challenges are gradually abating as reflected in the reducing attrition rates, they continue to exert pressure on our cost structure.”, said Nilanjan Roy, Chief Financial Officer. “In line with the capital allocation policy, the Board has announced an interim dividend of ₹16.50 per share, an increase of 10% over FY 22 interim dividend and an open market share buyback of ₹9,300 crores”, he added.

For six months ended September 30, 2022

• Revenues in CC terms grew by 20.1% YoY

• Reported revenues at Rs 71,008 crore, growth of 23.5% YoY

• Digital revenues at 61.4% of total revenues, YoY CC growth of 34.5%

• Operating margin at 20.8%, decline of 2.8% YoY

• Basic EPS at Rs 27.13, growth of 8.1% YoY

• FCF at Rs 9,858 crore, decline of 15.3% YoY; FCF conversion at 86.6% of net profit.